Intel (NASDAQ:INTC) has seen its fair share of shakeups, but few as pivotal as the recent exit of CEO Pat Gelsinger.
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His departure earlier this month wasn’t a quiet farewell – it was a forced move by the company’s Board of Directors, who reportedly lost faith in his ability to steer Intel’s fortunes back on course.
There is no denying that the news for Intel has been far from positive this year, with shares having lost almost 60% of their value.
Defenders of Gelsinger would claim that many of these issues plaguing Intel predate his arrival and, in fact, stem from longer-term mistakes, such as missing out on the smartphone chip boom and failing to account for the transition from CPUs to GPU technology.
Count top investor, known by the pseudonym Noah’s Arc, in the camp defending the former CEO. The investor believes that the surprising move speaks more to INTC’s lack of vision than any fault of Gelsinger’s.
“The frequent CEO turnover and board missteps over the past decade have left Intel without clear direction, making the stock risky at this time,” writes the 5-star investor, who sits in the top 3% of TipRanks’ stock pros.
Noah’s Arc argues that Gelsinger wasn’t just weathering the storm — he was building a ship to sail through it. According to the investor, Gelsinger had been repositioning Intel to seize opportunities in the AI-driven PC market. Profits from this venture were supposed to bankroll Intel’s next big leap – the expansion of its 18A node semiconductor manufacturing.
Looking at the company statements, the investor believes that the company remains committed to this strategic vision that Gelsinger was working to implement even if AI PC sales are lower than expected. For this reason, Noah’s Arc disagrees with the decision to push out the leader most aligned with the strategic direction.
“While the company as a whole has bought into the vision, removing the visionary (even if you think they are not executing at the speed you want to) is not usually the right move,” the investor explains.
Intel will now be looking once again for a new CEO to helm the company, and as Noah’s Arc points out, the incoming leader will have to contend not only with Intel’s strategic pivots but also with the weight of unmet expectations.
Given these headwinds, Noah’s Arc sees this as the moment to wave bye-bye to Intel stock, assigning it a Sell rating. (To watch Noah’s Arc’s track record, click here)
Turning to Wall Street, sentiment toward Intel is lukewarm at best. The stock garners 1 Buy, 22 Hold, and 6 Sell recommendations, culminating in a consensus Hold (i.e. Neutral) rating. The 12-month average price target of $24.43 implies a potential upside of ~17%. (See INTC stock forecast)
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Disclaimer: The opinions expressed in this article are solely those of the featured investor. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
